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Long-Run Growth of Nondefense Government Expenditures in the United States

Author

Listed:
  • A. Dale Tussing

    (Syracuse University)

  • John A. Henning

    (Syracuse University)

Abstract

To test a number of hypotheses regarding determinants of long-run trends Abstract in nondefense government expenditures, regression equations were estimated by the method of least squares using the following dependent variables: government purchases of goods and services (i.e., resource-using public expenditures) excluding defense; government transfer payments; and nondefense public expenditures, the sum of the first two. All were deflated for price level change and population growth. Three periods were used: 1900-1928, 1929-1969, and 1900-1969. The research tends to validate the influence of "Baumol's Disease, " which implies exponential growth of public expenditures on account of price effects due to a systematic public-private productivity-growth differential. The results cast doubt on the Peacock-Wiseman "displacement effect," which holds that public expenditures grow more rapidly than normally, immediately following wars or other "social upheavals, " because these events shift taxpayers' notions of maximum tolerable levels of taxation.

Suggested Citation

  • A. Dale Tussing & John A. Henning, 1974. "Long-Run Growth of Nondefense Government Expenditures in the United States," Public Finance Review, , vol. 2(2), pages 202-222, April.
    • Handle: RePEc:sae:pubfin:v:2:y:1974:i:2:p:202-222
    DOI: 10.1177/109114217400200203
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    References listed on IDEAS

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    1. Alan T. Peacock & Jack Wiseman, 1961. "The Growth of Public Expenditure in the United Kingdom," NBER Books, National Bureau of Economic Research, Inc, number peac61-1.
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    4. M. Slade Kendrick & Mark Wehle, 1955. "A Century and a Half of Federal Expenditures," NBER Books, National Bureau of Economic Research, Inc, number kend55-1.
    5. John W. Kendrick, 1961. "Productivity Trends in the United States," NBER Books, National Bureau of Economic Research, Inc, number kend61-1.
    6. M. Slade Kendrick & Mark Wehle, 1955. "Introduction to "A Century and a Half of Federal Expenditures"," NBER Chapters, in: A Century and a Half of Federal Expenditures, pages 1-2, National Bureau of Economic Research, Inc.
    7. J. Veverka, 1963. "The Growth Of Government Expenditure In The United Kingdom Since 1790," Scottish Journal of Political Economy, Scottish Economic Society, vol. 10(1), pages 111-127, February.
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    Cited by:

    1. Manuel Jaén García & Luis Palma Martos, "undated". "Public Expenditure Dynamics In Spain: A Simplified Model Of Its Determinants," Working Papers 9-04 Classification-JEL :, Instituto de Estudios Fiscales.
    2. Manuel Ja n-Garc a, 2017. "A Demand Determinants Model for Public Spending in Spain," International Journal of Economics and Financial Issues, Econjournals, vol. 7(4), pages 372-386.
    3. Massimo Florio & Sara Colautti, 2001. "A logistic growth law for government expenditures: an explanatory analysis," Departmental Working Papers 2001-13, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.

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